Bloomberg Demands Bailout Info

MANHATTAN (CN) - Bloomberg news service sued the Federal Reserve Board of Governors, demanding information on the Bush administration's lending program to private financial institutions. "While the taxpayers are the ultimate counterparty for the collateral," says the complaint, "they have not been given any information regarding the kind of collateral received, how it was valued, or by whom."

"In response to "the most cataclysmic financial crisis in America since the Great Depression ... the Fed has vastly expanded its lending programs to private financial institutions," says the complaint. But the public has been told little or nothing about "the posted collateral or of the Fed's methods in valuing it.

Citing the Bush administration $700 billion bailout plan and other recent corporate rescues, Bloomberg says in its FOIA complaint: "In response to the crisis, the Fed has vastly expanded its lending programs to private financial institutions. To obtain access to this public money and to safeguard the taxpayers' interests, borrowers are required to post collateral. Despite the manifest public interest in such matters, however, none of the programs themselves make reference to any public disclosure of the posted collateral or of the Fed's methods in valuing it. Thus, while the taxpayers are the ultimate counterparty for the collateral, they have not been given any information regarding the kind of collateral received, how it was valued, or by whom.

"To discharge its obligation as the eyes and ears of the public, Bloomberg sought access to this information under FOIA. To date, the Fed has failed to produce the requested documents, or even formally to respond to Bloomberg's request."

Bloomberg is represented by Thomas Golden with Wilkie Farr & Gallagher.

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